VICKEN CHETERIAN

Times of Troubles in Baku

The collapse of the oil prices is
causing high tensions across the globe. Oil prices reached a dramatic
height in 2008 and again in 2014, after which they collapsed. On
January 23 a barrel was being sold for as low as $27, and the lifting
of sanctions on Iran could put yet another 600’000 barrels of oil
per day on saturated markets. Regimes totally addicted to
petrodollars are feeling the heat. From Russia to Venezuela, from
Saudi Arabia to Kazakstan state budgets that calculated the barrel at
$50 or so have no alternative but to cut spending. Among all these
regimes the highest dependency on oil and therefore the most
endangered is Azerbaijan.

Azerbaijan and oil is a very old story:
Baku produced half the global oil in the year 1900. Over exploitation
exhausted the reserves, and by the time Azerbaijan separated from the
Soviet Union the great promise was off-shore reserves, costly to
exploit. It was the extensive exploitation of this oil that gave the
country its stability in the last decade, since Azerbaijan emerged
from the USSR with profound problems: one was the question how to
legitimize the new political power after the collapse of socialism,
which created tensions between the new Turkic nationalist identity on
the one hand, and ethnic groups on the other. The best-known case is
the centrifugal trend of Karabakh Armenians. While the Karabakh
conflict was the most violent, leading to a war that caused 35’000
victims, hundreds of thousands of refugees and continued antagonism
between the two neighbours, there were similar centrifugal trends
among other ethnic groups such as the Lezgins in the north and the
Talish in the south.

While the Karabakh conflict was on the
margin of Azerbaijan both geographically, the end of the Soviet Union
caused a deep conflict within the political elite of Azerbaijan. The
Soviet nomenklatura fell from power by a nationalist revolt led by
Abulfaz Elchibey, who in turn was overthrown by a military coup after
which the Soviet era strongman Heidar Aliyev came back to power. The
ailing Aliyev constructed an authoritarian regime, and then passed
power to his son Ilham in 2003, establishing the first post-Soviet
republican dynasty, the second such rule if we consider the Asad
dynasty in Syria.

The inexperienced Ilham Aliev came to
power at happy times. The Baku-Ceyhan pipeline was constructed in
2005, and oil started being exported in 2006. In 2008 oil prices
reached a record peak of $143 a barrel. Azerbaijan received billions
of dollars every year since. Did the regime of Ilham Aliev solve any
of Azerbaijan’s problems?

Baku purchased weapons for huge sums:
the military budget in 2003, when Ilham Aliev inherited the state,
was only $175 million; in 2015 it was officially an astronomic $4.8
billion. In spite of massive arms purchase, the Karabakh problem did
not see any progress. Azerbaijani position on Karabakh became
maximalist, and diplomatic negotiations reached a dead-end. The
situation on the front-line has degraded, where regularly clashes
kill young recruits from both sides.

Ilham Aliev’s internal policy is
equally a disaster. He initiated a number of extravagances such as
having the Eurovision song festival in Baku, or the European Games
sports events – during which 6’000 people were invited to Baku on
state budget. Billions were thrown on such events, and construction
of office-buildings and public monuments. These absurd projects can
only be understood as corruption schemes, where state money is used
to buy the loyalty of the elite.

Critics had no place in this big
fiesta: Journalists who investigating the deep corruption of Aliev
family ended up either being assassinated such as the talented Elmar
Husseinov, or in prison such as Khadija Ismailova. So did
sociologists like Arif Yunusov, and human rights lawyers such as
Intiqam Aliev. So many intellectuals ended up in prison that
Kurdakhani prison was called in dry irony the best university of
Azerbaijan.

A decade of limitless cash flow Ilham
Aliev did not bring any positive change to Azerbaijan: tensions with
Karabakh Armenians are worse than ever; political freedoms are worse
than in the 1990’s; the economic situation is worse than before:
the inflow of oil money killed local initiatives, especially in the
industrial sector. After the recent devaluation of the manat –
the Azerbaijani national currency – average monthly salaries are
only $287, which is lower than energy poor, landlocked and blockaded
Armenia.

The foreign power
that shares much responsibility for the situation in Azerbaijan is
Turkey of Erdogan. Ankara gave unconditional political and diplomatic
support to Aliev regime, thus supporting its corrupt practices and
wasteful policies. Azerbaijan’s best strategic moment to cut a deal
with Armenia over Karabakh was when its financial strength and
international prestige was at its highest. Yet, Ankara’s
unconditional support only hardened Aliev’s maximalist positions.
Ankara also collaborated in chasing critical Azerbaijani journalists
and intellectuals established ion Turkey, like Rauf Mirgadirov, who
was deported to Azerbaijan (2014) and immediately arrested.

The central bank spent billions to
preserve the national currency, but in December the government
abandoned this policy, leading to immediate devaluation of the
currency, and banks stopped selling dollars. Prices of basic
commodities and foodstuff exploded, causing a series of
demonstrations in a number of cities.

Ilham Aliev is facing his first serious
crisis. It is yet to be seen whether he is qualified to the job he
inherited from his father.

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